graza, hedge contracts are not usually written like that. The bank is looking for the reward to combat the risk (well, actually, I think the bank make sure the whole thing is risk-free for them, so they can just take the reward!).
kray, why would the company hedge 2.25Moz for a $22m loan? That implies a hedge rate of $10/oz, which can't be right, surely. A hedge is a commitment to deliver silver, the metal. I just don't get it.
LOL, no I don't care where you invest! But on that other "silver share" people were saying it was rubbish compared to CCU. What do I see the first time ever I read CCU on HotCopper? Two posts (one boasting) about how CCU is unhedged and has maximum exposure to the silver price. Two posters who haven't a clue about their company because they can't be bothered to read company announcements. Instead, I find that CCU have agreed terms with two banks to provide a loan of $22m for project development, PLUS, that is, IN ADDITION TO facilities for cost overruns, working capital and bonding/guarantee requirements. Maybe that is why it is 2.25Moz, at $25, to cover lending of $56.25m? Then the maths makes more sense. Who knows? But, if you are comparing financing of the "other company" to CCU, CCU loses heavily, because we don't know what the financing deals are, or how much debt funding they require.
Anyway, with silver kissing $48, both companies should be winners.
CCU Price at posting:
$1.10 Sentiment: None Disclosure: Not Held
